President Obama made his 3rd State of the Union Address tonight, starting at about 9:10pm. The Address was 65 minutes long, and included 85 breaks for applause. That includes roughly 24 standing applause from only Democrats, and 7 from members of both political parties.
The address started with a bow from President Obama. Begining in the first minutes with the end of the Iraq war and the death of Osama bin Laden, President Obama took credit without being blatantly obvious, even somewhat subdued. This of course places a very positive spin on what many have felt is a retreat from success in Iraq, a nation that is far from stable with its new democracy. Even so, none are upset with the return of American troops from danger.
In a similar manner the touch upon Osama bin Laden was also icing on a cake. As the President reminded the nation how bin Laden was taken down on his watch, it brings back the message that this was not done on the back of orders from President Obama. Given there was a glancing credit to President Bush for initiating the hunt for Obama, and passing acknowledgement of the input of Secretary of Defense Gates and the military for an operation that was starkly absent the normal ‘drop a drone’ approach that has been the hallmark of Obama Administration military operations. But the theme was still clearly that this was where the Obama Administration was due credit, even taking a slight dig at Secretary Clinton at the same time.
The ultimate tone of the State of the Union Address was revealed approximately in the 4th minute of the speech. Hope for America and keeping the American dream alive. Though toned down from the campaign speeches of 2008, it is the same message.
From this point the State of the Union ran through several key issues. The thought that Banks and the rich were at the heart of the mortgage crisis and America’s economic woes was inescapable. Whether it was blame for the sub-prime loans, or the supposed burden of not hiking taxes on the rich, it is their fault. Neither of which is an accurate portrayal of the situation.
President Obama made a clear point to state that banks will now be even mor regulated than before. This being done to protect Americans. Yet the massive amounts of regulation on banks and securities have never stopped a crash in markets or prevented a crisis, only altered the manner in which they come about and the ability of the majority to see them coming.
President Obama noted how he will seek to help homeowners, again. This time with a plan to allow homeowners to refinance their mortgages, paid for by banks. He left out that this will only apply for those with mortgages that are current, providing no help to the record high number of Americans that are in default or foreclosure. Record highs acheived and maintained during the Obama Administration, even with the horrendous attempt with the Make Homes Affordable Act. A $75 billion failure.
He also left out how banks, which must somehow absorb the losses that will be caused by the refinancing, will do so – likely higher fees spread among all customers. Lastly he forgot, as he insisted banks repay the bailouts, that Congress (which he was a part of) forced many banks to accept TARP. It was the Congress which he was part of that failed to set terms for repayment. He forgot to mention that over 60% of banks have repaid the TARP, with interest. He also avoided the fact that the Supermajority Congress, and the Obama Administration, sought to violate the terms of TARP and spend the repaid funds rather than pay down the debt as was required by the law.
President Obama made several comments that either avoided, obfuscated, or glanced over facts in the State of the Union. His discussion on mortgages we already stated. There was the takeover of GM, which was heralded as a success. It leaves out the fact that the bailout made by the Government is currently a loss to taxpayers, and may well never be repaid. He left out that Chrysler continues to owe the Government, and it may well never be repaid. And that Ford never took a dime.
President Obama alluded to how the “success” of the auto bailouts could be applied to other industries and States. Seemingly a veiled threat that the Government can and will takeover any industry it believes to be “too big to fail” – however that might be defined. Yet pointing to bailouts that may never be repaid, Government decisions on products (the VOLT) that are overpriced and unwanted, seem hardly convincing reasons for Government intervention. Which says nothing of the injustice paid to bondholders of GM when the Government took from to give to unions.
Perhaps one of the subjects of the State of the Union that will be most directly refered to will be the tax hike on the wealthy. The subject was brought up a mere breathe after stating that over 140 million Americans cannot afford a tax increase. But President Obama plans to try to impose a tax hike on those with an income of $1 million, raising their minimum tax rate to 30% (and obviously looking for more).
President Obama stated that “some” might call this class warfare. It is. But it is more as well. This income range also includes small business owners, the engine of job growth and innovation. Increasing their taxes, in States like New York, lead to those individuals and businesses leaving the State. What will it mean to the nation, likely not greater job growth, is unclear.
Even if the tax is passed, which is incredibly unlikely, it will not address the deficit. As President Obama alluded to, the massive debate of 2011 did little to inspire confidence. More importantly it did nothing to stem the deficit and produced the first downgrade of the national creditworthiness. The hoped for increase of tax revenue from the wealthy still would not stem that tide. Just as the often repeated $2 trillion in debt reduction, over 10 years, is meaningless compared to the $1.1 trillion debt ceiling increase in 2011, and $1.2 trillion expected this month.
But the proposal was made, using Warren Buffett and his secretary as a crutch. A comparison that is false and useless, since the secretary get a paycheck and Mr. Buffett receives income off his investments (like many retired Americans do) – 2 seperate tax rates which does not address the dollar amounts. But we have already spoken about Mr. Buffett and his unwillingness to lead by example and donate to the IRS whatever shortfall he believes the Government is due. A failure that President Obama equally has never risen above (he has never donated income to the IRS last we checked IRS records).
President Obama even tried to put lipstick on the pig that has been his handling of the economic purgatory that the nation has been in since his election. Credit card debt is down, which ties directly to loss of jobs. He is increasing the ability of homes to be run by “clean” (instead of the overused and unliked “green”) energy – all of 3 million of them. A big number until compared to the number of homes in the nation (over 131 million), or the number of vacant homes (19 million). He even left out the fact that while he is stating he is looking to expand oil and gas resources, he has rejected the Keystone pipeline for political reasons.
Even the small business tax credits he proposed is balanced by the tax increase of the Health Care Reform – a subject he shied away from as the majority of Americans still do not like or want the law, even as Courts defend it as a tax.
Internationally President Obama pointed to the Arab Spring as an example of his success. He left out his abuse of the War Powers Act. His insistance that America, under his watch, will support democracy across the world ignored his lack of action when Iranian students begged for American attention as they strived to introduce democracy in that nation. Likewise his direct statement of support for Israel flies in the face of his international call for Israel to go back to its 1962 borders.
The State of the Union, overall was a subdued pitch for re-election. It tried to make the Obama Administration look more successful than it has been. It tried to rally supporters and generate new supporters in the Independants by obfuscating what everyday American see and go through. It went after goals, though far more defined than has been in past speeches, that the Obama Administration has been incapable of passing or even addressing in some cases (like illegal immigration after the 2011 State of the Union).
This speech was not great. It was not motivating. It was filled with inaccuracy and deflection. It relied on the desire for hope that we all hold. But it did not give a clear indication of what President Obama sees as the path for the nation in 2012 – just his re-election.